And that also make Bharat Thakrar a bonafide Billionaire between the cash proceeds & shares he owns in ScanGroup! SG's market cap is approx 2.8 Billion.

Well... now its time for the next IPO coz there is KSh 3.8 Billion in refunds! In perspective, the refund (KShs 3.8 Billion) exceeds the market cap (KShs 2.8 Billion) of ScanGroup!

My gut feeling is that the number of shareholders will drop rapidly from the 96,000 level to less than 75,000 in time for the first AGM to be held mid-year 2007! I expect many current shareholders will sell their meager allocations (300-500) & the buyers are either High Net Worth individuals, Unit Trusts & Retirement Funds.

It is difficult to judge the direction of the price but early indications point to an initial steady increase in the price as supply gradually reduces. Of course, I expect supplies to increase during the Xmas season with a subsequent drop in price.

No Interim Dividend - most firms have this policy to cut down on costs. In SG's case, these could mean over 96,000 cheques!

The growth is commendable. I think SG should have sold more shares, eliminating their current debt & have ready cash for new acquisitions. Nevertheless, I think commercial banks will lend to SG based on its current performance.

A significant post-IPO event was the purchase of 70% of FCB (TZ) by ScanGroup through LoweScanAd (TZ). I think that will open the doors for SG to acquire more firms using a combination of cash & stock.

ScanGroup expects better trading results during 2H 2006 coz of cyclical factors. Kenyans have more holidays to shop in 2H esp the Xmas season when the big guns advertise ad nauseum.

Just a guess BUT I think the shares will open at 15/- +. The shares will be heavily supported by Institutional buying at reasonable P/Es. This will enable SG reduce their shareholder count to manageable levels.

I expect SG to take a hit in their 2H 2006 results relating to the IPO costs e.g. additional registrar fees for the shareholder listings and administration & maintenance costs relating to the refunds.

2007 will see additional line items including printing & mailing 90,000 Annual Reports and the hire of a huge hall (Bomas or Kasarani)...

Wednesday, August 23, 2006

I hope to add more to the excellent argument presented in response to my blog entry! My comments/observations in RED.

: Lafarge is running a monopoly and should have been investigated by the commissioner for price fixing ;-) and monopolies

It could be claimed LaFarge has a monopoly therefore competition should be encouraged! It is unfair to balme Bamburi for the current state of affairs when Kenyans could have established more competition.

Investigating them is a waste. The demand for cement is relatively high compared to production. Both ARM & EAPCC are running at 100% capacity. Both are trying to expand their production. Well, EAPCC was trying until the recent fiasco! The only firm with extra capacity is Bamburi who are using Econ 201 (marginal production & profits) to make more money!

Bamburi supplies clinker (raw ingredient for cement) to ARM & EAPCC. If Bamburi wanted to choke them, it would refuse to supply clinker thus reducing competition. Bamburi invested in a clinker plant in Nairobi when no-one was investing in Cement production. Foresight!

: the MD of Bamburi lied when he said that their shareholding in Bamburi had caused the shares in the firm to rise to the current high level.

If that's what he said, I would agree with you!: The truth is that it is the arrival of Ole Mapelu and his team of 5 managers and the changes that staff executed which raised confidence in the firm and its operations.

Mapelu 's team played a huge part in changing how EAPCC was perceived. I believe he was instrumental in bringing accountability to the firm. Don't discount the economic growth & stockmarket euphoria which boosted profits & share value. The stronger KShs also helped reduce the impact of the Yen loan.: The arrival of this team resulted in the rise of the EAPCC shares from 49 to its current level of over 110+, where it has been (or above) since with one hiccup.

: This team was the first team at EAPCC to turn around the effects of the disastrous Japanese Yen loan that the company took and which has cost it significant amounts in FOrex losses.

On this issue Mapelu lucked out coz the KShs showed some muscle since 2003. In addition, the Yen stopped strengthening against other major currencies. This was luck!

BTW, this does lessen the other more important achievements that brought sustainability to EAPCC.

: Ole Mapelu and his team had a performance contract. Their suspension and eventual departure had nothing to do with either their contract with the firm or with their performance. If anything, their courage in performing to the terms of their contract is what has resulted in their being dismissed - * they challenged Bamburi and indirectly LaFarge in Sudan (it is common? knowledge that Bamburi, totally owned by LaFarge, is building up its production capacity to 1,000,000 -million - tonnes p.a. to target the Sudan market),* by entering the Central African market they ALSO challenged Bamburi and indirectly LaFarge in Rwanda and Congo (it is also common knowledge that Bamburi through wholly-owned Hima Cement in Uganda is building up production capacity to enter Congo, Rwanda and Burundi)

The Rwanda plant will challenge Hima for Rwanda, Burundi, Congo & perhaps Uganda. I do not know if LaFarge has a Sudan plant. Unless EAPCC was challenging LaFarge in S.Sudan, the argument doesn't hold coz transporting cement to Sudan is too expensive for the long-run. If there is sufficient demand, the only alternate is building a new plant there.

: Questions that were raised and that have not yet been answered by the board or by any of its large shareholders

1) Why and how is it possible that LaFarge can have a share holding that gives them control, access and influence over the operations of all of its competitors in the market and the region? Lafarge owns Bamburi 100%, East African Portland 47% and Athi River Mining 15% and life proceeds on as normal. Am I missing somethign? As far as I am concerned, the shareholding that Bamburi has in its competitors should be stopeed immediately. What is the Comissioner of Monopolies doing? Are you going to say that this is technically not a monopoly? ;-)

First the Commissioner of Monopolies has bigger fish to fry! He should have gone after "old" Telkom which has been an "awful" monopoly for years! With pathetic service!

Second, I think Safaricom & Celtel duopoly needs some competition!

Bamburi's ownership in EAPCC & ARM is a result of 2 factors:

There was the (international) Blue Circle & LaFarge merger that effectively made LaFarge own a stake in Bamburi & EAPCC.

Capital Financing - During EAPCC's lean years, it tried a Rights Issue to shore its finances but many Kenyans (minority shareholders) did NOT participate thus LaFarge (which did participate) ended up with 42%. You can't blame Bamburi for doing the smart thing!

EABL faced a similar situation a few years ago when Diageo/Guiness took up their Rights whereas most minority shareholders did not! Some stockbrokers even counseled their customers NOT to take uo the Rights. Prior to the Rights, EABL offered a Scrip Dividend, which would have benefitted both EABL & their shareholders but many Kenyan (minority shareholders) sat it out in preference for cash! EABL was fighting it out with Castle & needed to preserve cash for restructuring & marketing.

ARM was in mega trouble (when Kenya's economy was in the crapper) coz of low demand for cement, high finance costs & a low share price thus was unable to do a Rights or raise cash from banks. Bamburi stepped in as a saviour by taking a preferred equity position. They also agreed to supply clinker to ARM thus saving ARM from cashflow problems & certain failure. Their investment in ARM not only saved ARM but paid off well. Smart thinking! I wish I had done the same! ARM ordinary shares have risen 15x since Bamburi's investment.

When fickle short-term investors (many Kenyans fall into this category) refuse to stand by their companies in hard times (witness the lack of support for Uchumi by many minority shareholders) when they need to put up. I would probably be in the same position coz I feel it is good money after bad esp if I am giving my money to the same management!

Would Kenyans have bought shares in the Rights Issue if kennedy thairu was still MD of Uchumi?

Would Kenyans have bought shares in the Rights Issue if alexander kaminchia was still MD of KCB?

BTW, Bamburi owns 42% whereas Govt (Treasury+NSSF) own 52% & the public have 6%. Therefore effective control belongs to the government. Yikes!

2) Why is it that the board has not given a position statement on how they plan to take the organisation forward with regards to the entrance of the Sudan and Rwanda markets? What is the timetable for these entries? Or have they halted these plans at the insistence of Bamburai??

The Board should come out with answers to the queries.

Please note that Bamburi has 42% but government (kituyi & his posse) control the Board. Unlike KQ (KLM 26% vs govt 23%), the power lies with the government who can force any decision through coz of majority control.

3) All of Bamburi's profits go to France. Over half of EAPCC's profits remain in Kenya. Who will Mukhisa Kituyi, David Nalo and their team give priority to?

Erroneous statement.

Bamburi is PUBLICLY traded. Kenyan shareholders get their dividends in Kenya. Bamburi actually pays a low dividend compared to other firms. They continually reinvest into improving their operations. This regular re-investment has made them the largest cement firm in E & C Africa.

BTW, NSSF owns 16% while 10% is the float on the NSE.

The current government gives priority to its own (personal) pockets! They don't care two hoots about Kenya, Kenyans or LaFarge. If the government had control of KQ, the arturs would have being flying the 777s to Armenia on a whim! Of course, KQ would be dead broke!

4) What is the use of performance contracts if managers will be fired or forced to leave organisations BECAUSE they were doing their best to meet their targets for their own good and that of their organisation and their country? So what if Mutua na wengineo wanajivunia kuwa wakenya with things like these happening?

Wacha Mutua! He is a puppet. I actually feel sorry for the jamaa. He has to vomit what he is told. Even then, he gets told off by government bigwigs!

I agree that those who try to meet their performance contracts should be allowed to do so! Lakini in Kenya, unfortunately, you can't ignore the "godfathers" interests! Ole Mapelu was headhunted so hakuna godfather! I believe since he was not helping grease the way... he was sukuma'd to allow for more plaint management.

5) Does Mukhisa Kituyi, Bamburi MD know that Kenyans are not watoto any more?

Huh? Bamburi is not at fault. The Business of Business is Business!

Kituyi - what can I say? I was a huge fan but recent events are very disappointing! He & Kimunya could have been the czars of Kenya's economic revival! We would have been proud of the 2Ks... maybe even elected them to be prez!

6) Why has parliament not instituted an enquiry into this whole issue? When you look at how much money East African Portland has generated in 1 year in profits, does it make sense to pressure the team that engineered this rapid change out? What are we not being told? And what are the PAC and the PIC afraid of that they are not pursuing this matter?

Please not another commission or inquiry! Most politicians do not understand Business. Look at the foolish/stupid comments on Scangroup's IPO! An inquiry would probably mean more wasted cash! And someone on the inquiry team might end up with a new house built courtesy of EAPCC!

7) ColdTusker, I think that the hold LaFarge has on the its competitors and therefore the industry NEEDS a BIG (like REALLY BIG) re-think. I don't think that the market control that LaFarge is obviously exerting on its competitors is anywhere close to the SMALLER evil of govt involvement in business.

Oh no... NO, HAPANA, no way! I CANNOT support this argument. I would rather have an efficient monopoly than the government run any business! Please show me a government success where the government had absolute control!

KQ - Unprofitable until KLM came along. Now among the top 5 airlines in Africa & very profitable.

KR - Watch its growth after privatisation. I wish I could buy in now coz I expect great things in 5 years!

KCB - What a mess until government was forced to reduce its holdings & become a large minority shareholder with substantially reduced control!

NBK - Still under a huge NPL portfolio

KPLC - Used as cash cow in 1992. Demand has exceeded supply for many years!

The government through its "control" has caused the economy to lose untold BILLIONS.

Two examples:

A private & efficient Telkom could have made Kenya the "India of Africa" for Business Process Outsourcing (BPO) if Telkom had been privatised 5 years ago! We could have had Call Centres lined up on the road all the way from JKIA to Machakos! Jambonet was a piece of crap. Its the competition from KDN & Vsats that spurred it into action!

The government through Telkom was dead set against VOIP but VOIP is set to change telecommunicatons in Kenya. Using VOIP through their internet gateway means I can call UK for 40% of what it used to cost me. Even Telkom is pushing VOIP. Imagine if VOIP was allowed in 3 years ago?

BTW, wWe do not even know the extent of Telkom's losses but I bet they are STAGGERING! They will probably need huge writedowns on their outdated equipment! The only saving grace is Safaricom BUT this was thanks to a duopoly & Vodaphone's management not foresight by Telkom.

NBK has NPLs that exceed KShs 17 Billion! That is greater than the value of MOST listed firms in the NSE. Here is an example: CFC Bank & HFCK combined are worth KShs 17 Billion! Most of these NPLs were accumulated in the days of government stoogie john simba!

If not for Marambii's firm hand, I think NBK would have collapsed! He has done a great job in stanching the red ink! The government had no choice but to give him full control since the NSSF would have lost Billions (of our hard earned money) had NBK collapsed! Customers were fleeing NBK & there was no more to steal!

AnonX

PS: Ms K, does anyone recall Kituyi repeatedly WARNING Kenyan business to keep off Sudan until he gave them a go-ahead?!?!?!?%^#$%^@&#

I don't recall his warning but was he trying to limit access to the S.Sudan for his cronies?

We need to fast-track more IPOs to enable investing the cash in farms, factories, buildings, etc before these funds are used for consumption!

The government needs to issue infrastructure bonds to enable Kenya accelerate economic growth. The time is ripe to divest of all the utilities, including sell more shares in KenGen, KPLC & an IPO for KPA.

Tuesday, August 15, 2006

Kenya Times had started gaining, albeit slowly, my respect as a credible news source.... but this recent article gives me great pause!

The IDIOTS are back... This is a poorly researched & merely sensationalist article... The Times Reporter doesn't even identify himself lest he never finds a job with another credible media outlet.

I have Italicised comments/observations made by Kenya Times.

A DEAL that the Kenya government made with the Royal Dutch Airlines (KLM) over the privatisation of Kenya Airways ten years ago has rendered it irrelevant over the management of the multi-billion shillings airline that is touted as the Pride of Africa, we can reveal.

First, "reveal" what? There is NO secret that KLM has always had the RIGHT to appoint the MD & FD. I had mentioned this aspect in my blog on July 30 2006. So why couldn't KT "reveal" this "important" info 10 years earlier?

Second, after the EAPCC fiasco among others, I am GLAD that KLM has the RIGHT to appoint the MD & FD.

Third, the government (kibz' buddies) tried to get on the KQ board but were rebuffed in 2003.

Board matters at the Kenya Airways, it has emerged, have since remained a preserve of KLM which acquired KQ with Kenya having very limited say over the day to day running of the airline including the appointment of its Managing Director, Finance Director and Technical Director.

That is great news that the government does not have day-to-day responsibilities! They make enough of a mess with less important matters!

“You should be talking about the benefits that the airline brings to the country and not who owns it. What does that help you?” Naikuni asked.

KQ has made Nairobi the hub for East & Central Africa thus bringing in airport taxes/revenue as well as paying corporate taxes while spawning a industry based around supplying KQ's needs e.g. food, water, blankets, maintenance.

KQ's direct flights to UK, Amsterdam &, soon, Paris has expanded the market for Kenyan goods esp horticultural products. Don't forget the all important tourist trade that relies on KQ to bring the tourists to Kenya!

Before the transfer, the Kenya Government, which then owned KQ, was forced to pay all the airline’s debts amounting to about US dollars 80 million.

Why would KLM want to absorb KQ's debts? The government lost nothing coz KLM invested $26 Million to refinance KQ, then the government 51% of KQ to the public thus bringing in more cash. The $26 Million paid by KLM reinforces the value of KQ at $100 Million.

In any case, the "debt" was a result of MISMANAGEMENT by the kanu government. kanu OWNS Kenya Times!

And Kenya Airways could soon lose the tag and privileges associated with the national carrier prestige, following the change in ownership structure. According to the International Civil Aviation Organisation (ICAO) regulations, a national air carrier enjoying international traffic rights of a member state must among other things, be either positively controlled by that state or its people

I have no idea if KT's assertion is valid BUT ICOA hasn't withdrawn it for 10 years & it is highly unlikely that ICAO will start now esp in the era of liberalisation.Surprisingly, KQ has never publicly published articles 17 and 53 to enable shareholders know the identity of ownership of the airline. This in essence, makes it unlawful for the company to be listed at the Nairobi Stock Exchange (NSE). What listed firms publicly publish all their articles annually? In any event, shareholders have a right to view the documents. KQ may have published the articles as part of the prospectus.

When contacted yesterday, NSE chairman Jimnah Mbaru expressed shock and promised to investigate the issue. “These are issues that we have never considered, but we are going to look into them,” he told Kenya Times.

What exactly is he shocked about? The NSE should be concerned about insider trading as alleged in Uchumi & Ea Cables.

This explains why the government of Kenya took full responsibility, when a Kenya Airways jet crashed off the Coast of Gabon.

KQ has never had a jet crash off Gabon's coast.

Some of the clauses included in the Memorandum and Articles of Association were outrightly in favour of KLM, which still carts away a huge chunk of the airline’s profit.

KLM gets the same (stingy) dividend per share as the rest of the shareholders! KLM INVESTED their money not donated it so they expect a return! The government might not invest with a profit motive but not the private sector!

Following the sacking of the long serving company secretary L.G.Kamau, details are emerging that all is not well at the airline afterall.

Kamau resigned/retired/sacked a while ago as part of a major cost cutting process instituted soon after Titus Naikuni became CEO! So why would these "issues" be coming up now?

Monday, August 14, 2006

Let's put aside the goverment divestitures & move to the real driver behind the economy, the Private Sector. As seen with the recent ultra-successful ScanGroup IPO that the principals behind many Private Firms see the NSE as a way to "exit" or "cash in" their success.

The rumour mill has been active over the past 2 years about new listings from the Private Sector since the Bull Run started.

Let's examine some of these - Please send me more info to expand on the different firms.

CAUTION: These are NOT all facts but rumours.... nevertheless, where there is smoke, there may be fire!

Orion EA

Chemicals especially active in the agricultural sector

Triple A Capital

The firm has been adversely mentioned in the Kenya Ports Authority saga where it acted as the middleman for a loan.

Adopt-A-Light

Esther Passaris owned/controlled.

It is the largest outdoor advertising firm in Kenya & is instrumental in placing road name signs all over Nairobi.

Rumoured to be in a deal that would make it a subsidiary of ScanGroup.

Unlikely to go public unless they need to coz its easier for them to run a closely held empire. In addition, funds are easy to come by with the Bonds on the NSE & a close relationship with international financiers.

Commercial Bank of Africa

Supposedly controlled by the Kenyatta & Merali families

A strong performer in the sector that caters to mid-sized businesses

High profile CEO - Isaac Awuondo

Bidco

It wants to become a pan-african player in the cooking oils & fats industry

Does it need cash from a IPO? I doubt since they have international sources for the funds e.g. IFC, World Bank, etc

Facing trouble in Tanzania since it is viewed as a "Kenyan" firm rather than an E.African firm

Sarova

It has an impressive portfolio of hotels

The recent unfortunate death of the CEO on an Ethiopian trip to look for potential investments will slow the process.

Perhaps Sarova can draw on the success of TPSEA as a public company to list

Friday, August 11, 2006

Since KenGen & ScanGroup's massive oversubscription & the presence of excess cash in the Kenyan economy, there has been a clamour for more IPOs, Offers for Sale, etc by Kenyans who are in the investing mood...

I expect the easy pickings to be first to be sold off...

Mumias - Already listed & very profitable with a excellent management team. The government might sell about 92 Million shares in Mumias bringing down its ownership to 20%. This would be the easiest sale/divestiture to accomplish since the shares are traded & the sale does not face the same hurdles as an IPO. Based on the current price, the government can expect almost KShs 5 Billion.

East African Portland Cement - It had been profitable under Ole Mapelu's management team who resigned en masse to protest government interference. Since the firm is listed, it will be an easier sell on the NSE but the debacle has hurt the attractiveness of the firm UNLESS the government becomes a minoirty shareholder. It is not LaFarge's ownership that is a problem but the government's even though it is portrayed as a LaFarge "issue". I would rather have LaFarge as a 42% owner than the government as a 1% owner!

Kenya Re - It has shown profitability in the past 2 years but investors should ask for a THOROUGH assessment of the assets & liabilities.

Eveready Batteries - It has a bad rap coz of declining sales & profits but might be a successful IPO at a fair price.

Safaricom - This would a mega-IPO by Kenyan standards. It faces multiple hurdles since Vodaphone probably has pre-emptive rights. If Vodaphone drops the pre-emptive right in exchange for an additional stake then the IPO can go forward.I think the government will do an IPO during the electioneering period to energise campaign & boost political goodwill!

Telkom - No IPO until after:

Safaricom IPO

Suitable strategic/technical partner is found

Retrenchment of excess staff (not in an election year)

Kenya Ports Authority - Too political for now plus its a cash cow for the corrupt as well as gateway for "untaxed" goods. Look at the artur brothers saga.

Kenya is NOT a communist state or authotarian state that one has to get PERMISSION to travel abroad! Is kituyi smoking peyote?

Kityui, who tabled supporting documents, also questioning Mapelu’s decision to promise the people of Southern Sudan that the cement manufacturer would construct schools in the region.

Promising to build schools ni BIASHARA. When BAT (UK controlled company) or EABL (UK controlled company) or Bill Gates Foundation decide to donate funds they can do it ANYWHERE they want!

In any case, most Firms donate as a means of ADVERTISING. Tulijenga shule na cementi kutoka East Africa Portland! Chances are EAPCC would have provided the cement while aid agencies the rest!

Crown Berger (Mozambique/Malawi controlled) donates paint to various Kenyan institutions in order to drum up additional business! It gets into the press & greases the path into a new market.

Ole Mapelu wants to tap into the HUGE S. Sudan market! The aid money will flow in for new roads, schools & hospitals! They will need cement. Better to sell Kenyan cement than Egyptian.

kituyi is the Trade & Industry minister but doesn't sound like one!

Mapelu, while on a tour of the region, also allegedly promised that his company would train the local people in masonry, construction, and other skills in and outside Kenya as part the company’s social corporate responsibility.

That is a SMART idea. By training masons & construction, you get more folks using, GASP, cement!!! This is DEMAND PULL economics... Without guys who know how to build using cement, there will be little cement consumption!

If only Kenya had trained contractors to use cement for roads then we could boost the local producers instead of importing bitumen.

Ole Mapelu is being accused of donating 4,000 bags of cement to S. Sudanese officials without "Board" permission. At most, this is an oversight BUT the value is nominal considering Ole Mapelu is looking at exporting & selling MILLIONS of bags as well as building a factory in Sudan!

Does kituyi prefer the Sudanese use local mud instead of Kenyan cement?

With "friend" like kituyi does Kenya need enemies?

There is something very FISHY going on... And it ain't the fish that are stinking!

Tuesday, August 08, 2006

Tanzania seems to be going counter to all things East African. If they do not want to be part of the EAC then let it be!

TZ is charging Kenyan & Ugandan drivers $100 as a "temporary" work permit fee. That is a ridiculous amount considering the low wages prevalent among lorry drivers! Many lorries have 2 drivers for safety reasons have to pay $200. This raises the cost of business for all. It makes sense to register all the drivers who come through for security reasons & a modest fee like $5 would cover expenses of monitoring such a program.

TZ has plenty to gain from a stronger E.Africa esp from increased tourism overflow from Kenya.TZ has in recent times kicked out journalists & managers from the Nation Media Group by withdrawing their work permits coz they ran stories critical of the current government.

I think the Merali firms need to be categorised into "Old Economy Firms" & "New Economy Firms". The OECs are necessary & important coz we need tyres & tea but the growth will come from the NEFs.

Most banks (Equatorial & part ownership of Commercial Bank of Africa) straddle both "old" & "new" since technology is core to their operations.

I am not a fan of Merali's listed entities (both are OEFs) i.e. they do not make much money for its minority shareholders:

Sameer Africa (which IPO's some 10 years ago at 35.50) which has been a mega-disappointment to all who bought into the IPO or even thereafter. The price on 8 Aug 2006 was 15.50 so all you have to show for 10 years is 50% loss in value & some miniscule dividends.

Sasini has seen droughts, poor prices, government interference & strong KShs since 2004 thus its profits have been subdued! These traded at 120/- at one time! Currently at 29/-.

On the other hand , the unlisted NEF firms are geared for growth including Celtel, KDN, Swift Global & Dimension Data. These are the new economy companies that should do well as Kenyans become internet savvy & Kenyan businesses look at the internet as a place to do business.

Rumours have been swirling for the past 2 years that Eveready will go public but there has been nothing concrete. Unfortunately, Eveready has suffered intense competition from imports that have hurt both sales & profits.

You can't entirely blame the Management or ownership for the decline coz the gov't doesn't help. The gov't should & could:

Nevertheless, other local firms have done much better but these have been primarily FMCG firms e.g. EABL & BAT.

To Eveready's credit, they have survived the lean years & might improve their performance with E.A.Community & Sudan. Many industrial firms did not make it through the lean 1990s.

I have to give credit to Naushad Merali that his firms continue to operate in Kenya providing Kenyans (though his firms hire a dispropotionate number of Indian expats) with jobs. He could have shut down both the Eveready & Firestone factories to become a mere importer BUT to his credit, he kept them open. I hope that the larger EAC market will benefit both firms since Kenya needs the exports & jobs!

Sunday, August 06, 2006

Rumour mill was working overtime about the oversubscription. I heard 20%, 80% & 100% but it turns out to be 400%! The 500% mentioned in the press INCLUDES the 100% shares available...

So Scangroup could have sold over 345 Million shares vs the 69 Million they have on offer!

Unfortunately, this means most applicants will get less than 10,000 shares & as low as 1,000 shares per applicant!

KenGen, a much larger offering, was only oversubscribed by 250%.

I expect the price to rise to 15/- as the corporate buyers (Mutual Funds, Insurance Companies, etc) try to buy on the secondary market BUT they are unlikely to pay "crazy" prices!

Well, whatever those idiotic MPs think (do they?), Kenyans voted with their wallets! Most banks were not even financing this IPO yet they had a 400% oversubscription.

Let the good times roll.

We need to have another large IPO to suck up the cash. Since Kenya Pipeline Corporation & Kenya Ports Authority are showing good profits, they would be great candidates. Further these firms can benefit substantially from the additional cash to expand their infrastructure!

Thursday, August 03, 2006

Kenyan CEOs have come of age where they will resign in the face of intereference! I wish the Mr. Ole Mapelu & his managers the best!

KBC carried this story. I wonder how long the quality march on KBC will last considering the government is interfering again!

It is this blatant interference that brought down KR, KPTC among tens of firms controlled by the government. The business of business is business! The government's job is to create a an environment that fair for all & allows for businesses to thrive thus uplifting the standards of living!

EAPCC had started making large profits under Mapeyu. It was on course to expand in Rwanda & Sudan! This was growth unprecedented for them. For many years EAPCC palyed second fiddle to Bamburi but was showing its mettle!

EAPCC could have gone the same way as KQ but might end up as Uchumi! I believe EAPCC should be removed as a "parastatal" thus freeing it from the whims of government crooks!

Kituyi has been adversely mentioned in the Nation of complicity in certain shenanigans. Please no more Commissions of Inquiry on this matter! How do we find out the truth?

In 2003 the government tried to get their nominees onto KQ's board but KLM brilliantly outmanouevered them coz of shareholder support + their 26% ownership. Further KLM has the RIGHT to appoint the MD & FD. Thank heaven for small favours!

All the best to Mr. Mapelu & the managers who did the honourable thing!